January 28, 2007, San Mateo County Times, Schwarzenegger sides with redwood activists (Pacific Lumber) by Mike Zapler,

January 28, 2007, San Mateo County Times, Schwarzenegger sides with redwood activists (Pacific Lumber) by Mike Zapler,

Fate of a 200,000-acre swath owned by Pacific Lumber is in doubt

SACRAMENTO — The Schwarzenegger administration on Friday sided firmly with environmentalists in a potential legal battle with Pacific Lumber Company over a huge swath of ancient redwoods in Humboldt County that could be jeopardized by the company's financial troubles.

The fate of a 200,000-acre swath of redwoods owned by Pacific Lumber was thrown into doubt last week when the company filed for bankruptcy in Texas. In 1999, the state and federal governments spent $480 million combined to buy 7,400 acres of the company's redwoods, now part of Headwaters Forest Reserve, and establish a "habitat conservation" plan to protect endangered species on 200,000 acres of the company's land.

Environmentalists and Democrats worry that the company will try to escape from that 50-year deal during bankruptcy proceedings — a maneuver that would boost the timber company's value. On Friday, the Schwarzenegger administration weighed in, declaring that the state will use every possible means to protect the redwoods.

The governor's stance ensures that Pacific Lumber will face a tough legal battle if it tries to extricate itself from the redwoods agreement.

"We intend to be dogged and unyielding in our efforts to protect California's interests and hold (Pacific Lumber) to all of its obligations," Mike Chrisman, secretary of the state Resources Agency, wrote in a letter to the Democratic leader of the state Senate, Don Perata of Oakland.

Pacific Lumber spokeswoman Andrea Arnot said the company to date has not asked the bankruptcy court for any changes to the Headwaters agreement, which she called the "most stringent environmental standards" ever placed on timber harvesting.

When asked whether the company might seek such alterations to the deal at some point during bankruptcy proceedings, Arnot said, "You're asking me to speculate how a legal proceeding will go. I can't speculate."

Environmentalists appreciated Schwarzenegger's help in what could be a protracted legal battle. "Taxpayers made a significant investment in these environmental protections," the Sierra Club's Paul Mason said, "so it's very welcome to see the state will be taking all possible steps to ensure those commitments are honored."

Schwarzenegger's opposition isn't the only obstacle the logging company would face if it tries to nullify the redwoods agreement. The deal's requirements were attached to the deeds of Pacific Lumber's land to ensure that new owners would be bound to the same rules if Pacific Lumber ceased to exist, said former state Senator Byron Sher, D-Palo Alto.

In filing for Chapter 11 bankruptcy, Pacific Lumber blamed what it called overly strict state water regulations — rules separate from those contained in the redwoods agreement — for unfairly squeezing logging profits. That led some observers to wonder whether the company will try to get out of the deal it had signed.

The 200,000 acres of Humboldt County forests at issue is roughly seven times the size of San Francisco.