Loggers, Environmentalists, And State in Knotty Fight Over California's Redwoods

THE 3,000-acre Headwaters Forest in northern California harbors trees taller than Norman Schwarzkopf and older than the Crusades. It is the largest privately owned grove of redwoods in the world. Until recently, it seemed many of these ancient sentinels would end up as someone's deck or hot tub. Now, under a novel "debt-for-nature" swap being put together, they could become the crown jewel of a decades-long quest to preserve what remains of the world's tallest trees.

"It is like the last great buffalo herd," says John Amodio, environmental adviser to California Gov. Pete Wilson, one of the parties trying to broker the deal.

The talks between the state and federal governments and Pacific Lumber Company, owner of Headwaters, is one of two major thrusts in California that could affect the cutting of redwoods and perhaps affect forestry practices nationwide.

The second effort, less amicable and far more encompassing, is an attempt by environmental groups to reduce overall timber harvesting in the state and limit the controversial practice of clear-cutting.

A compromise was recently worked out between environmentalists and Sierra Pacific Industries, one of the state's largest timber companies. But the deal was rejected by the timber industry as a whole.

Now both sides are descending on the state Legislature with competing ideas for regulating logging. The outcome will help shape the future of the $3 billion timber industry in California and perhaps across the West, since other states are closely watching the dispute here.

"The stakes in this are huge," says Kevin Eckery of the California Timber Association.

Nature's prized handiwork

In the early 1800s, 1 million acres of old redwoods covered the misty northern California coast. That has dwindled to 95,000 acres. Redwoods lead a dual life: They are among nature's finest work, but are also prized by loggers and consumers.

Of the virgin redwood left, 75,000 acres is protected in state, local, and national parks. About 20,000 acres remain unprotected in private hands, mainly scattered on timber company lands.

Headwaters Forest, near Eureka, is not only a significant expanse of old-growth redwoods but is strategically located. Environmentalists, who have been agitating to save it for years, say the forest would act as an "ecological bridge" between protected groves to the north and south.

Undulating and damp, Headwaters harbors redwoods more than 1,000 years old and 300 feet tall. The forest, which also contains old-growth Douglas fir, is home for rare red-tail hawks, marbled murreletes, and tailed frogs.

"There is no question this would be a crown-jewel addition," says Joan Reiss of the Wilderness Society.

Under the plan being negotiated, junk bonds would be swapped for trees. Pacific Lumber issued the high-yield bonds - reportedly worth $55 million - to the now-defunct Columbia Savings and Loan of Beverly Hills. The federal government seized the thrift and now owns the notes.

The idea is for California to acquire the bonds from Uncle Sam and give them to Pacific Lumber in exchange for Headwaters. By reacquiring the notes in a swap, the company would be absolved of its debt. California and the federal government would have a protected forest.

There are snags. No one yet knows how much the forest is worth; estimates run from $100 million to $700 million. Its value will determine how much other money would have to be raised. Ideally, California would like to see the Resolution Trust Corporation (RTC), the federal agency in charge of disposing of failed savings-and-loan assets, sell the bonds at K mart rates.

The RTC, though, is up against its own pressures - including a mandate from Congress to make as much as it can for taxpayers. "They will not be given away for free," says one RTC official.

Proponents of the swap in California are preparing a bond measure for the June 1992 ballot to help pay for the forest. The governor's office would also like to see federal and private money chipped in. Can a workable deal be struck? "We're more hopeful than wary," says Mr. Amodio.

The larger battle

The broader effort to slow timber harvesting in California is more confrontational. In the compromise struck between environmental groups and Sierra Pacific, some key forests would be protected and loggers would be permitted to harvest only as much timber as grew each year.

Clear-cutting, now allowed up to 120 acres, would be limited to 20 acres. The practice would be banned on old forests, and companies would have to set aside 15 percent of their ancient stands for wildlife. Cutting of old redwoods would be limited.

The Timber Association of California says the plan would drive companies out of business. The association proposes limiting clear-cuts to 40 acres and would preserve some ancient forests, though redwoods aren't mentioned in its plan. It differs with the Sierra Club and other groups on annual harvests, protection of watersheds, and composition of the state Forestry Board.

The two sides had hoped to strike a deal to avoid a bitter ballot campaign like last year's costly fight over two rival timber initiatives. Voters may again be summoned to be the arbiter if the Legislature cannot resolve the dispute. Of that possibility, one legislative aide says: "My guess is there is going to be substantial give and take, but we will get a compromise."