San Francisco land included in offer for forest
12/06/96
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The San Francisco Examiner
Friday, Dec. 6, 1996
c 1996 San Francisco Examiner
S.F. land included in offer for forest
Officials draw up list of properties to trade for Headwaters
Jane Kay
EXAMINER ENVIRONMENTAL WRITER
CALIFORNIA
State and federal officials are offering the Transbay Terminal in San
Francisco and millions of dollars worth of Kern County oil and gas
leases, among other properties, in a trade for the prized 3,000-acre
Headwaters grove and other Humboldt County redwood trees.
Treasure Island, once suggested as a federal asset up for grabs, is
not on the list.
Deputy Interior Secretary John Garamendi said Thursday that redwoods
owner Charles Hurwitz would peruse the list and pick his favorites.
The federal and state governments had a deadline to offer the assets
by Thursday under an agreement forged Sept. 28 by Garamendi, Hurwitz,
Sen. Dianne Feinstein, D-Calif., and state Resources Secretary
Douglas Wheeler. In exchange, the government would get the biggest
chunk of the last privately owned old-growth redwoods in the world.
The federal government is offering $250 million of assets, including
the $200 million worth of Kern County oil and gas leases and 10,722
acres of North Coast forests.
Wheeler submitted a list of 51 state properties that would be
classified as surplus. One is the three-block area owned by Caltrans
that includes the Transbay Terminal at First and Mission streets,
which The City hopes to demolish as part of a redevelopment project.
Hurwitz can pick $130 million worth of state properties.
Subject to S.F. zoning.
If Hurwitz obtained the Transbay Terminal land, he would have to
abide by local zoning, Wheeler said. City planners have considered
the area for open space, affordable housing, small businesses,
cultural institutions and a CalTrain extension.
Mayor Brown was out of town and couldn't be reached for comment.
"This is an area in which The City has enormous interest," said his
spokeswoman, Kandace Bender. "That area is being surveyed by the
Redevelopment Agency. The City has been working for at least 18
months with neighbors and agencies to come up with an acceptable
plan."
Of the Transbay Terminal, Bender said, "The place is decrepit. It
needs to be redone. The place is falling apart.
"If, indeed, Mr. Hurwitz has been offered this property, The City
would certainly want to talk to him about the studies and the plans
that we've been putting together."
Lonnie Lawson, board president of the environmental group San
Francisco Tomorrow, said a plan is moving ahead for affordable
housing when the Transbay Terminal is torn down.
"If the land area was designated by San Franciscans for affordable
housing, I think that is what we should have," Lawson said. "Just
because some land deal is being made does not negate the need for
affordable housing in San Francisco."
Other local properties
Hurwitz also has been offered several other small state-owned
properties in the South of Market and China Basin areas, as well as a
vacant 32-acre parcel in Orinda and Moraga.
In addition, the state is offering the 9,000-acre Latour State Forest
in Shasta County, 110 acres of Eureka waterfront property and 1,100
acres near Chino state prison in San Bernardino County, among other
properties.
Under the agreement:
*Hurwitz would give up 5,625 acres of redwoods, including the 3,000-
acre Headwaters grove and 435-acre Elk Head Springs, both home to
2,000-year-old redwoods and endangered marbled murrelet sea birds.
*Elk River Timber Co. in Arcata would contribute 9,600 acres, 7,755
going to Hurwitz and 1,845 acres going to help form a new 7,500-acre
Headwaters forest, 15 miles east of Eureka.
The Interior Department estimates the 7,500 acres are worth from $400
million to $700 million. The federal government will be swapping its
$250 million in assets, and the state will contribute $130 million in
assets.
Hurwitz, president, CEO and major stockholder of Maxxam Inc., parent
company of Headwaters owner Pacific Lumber Co., will negotiate with
government representatives to set in place an appraisal process, then
haggle over the specific properties on the lists. The agreement over
properties should be ready in 40 days.
Congress and the Legislature would have to approve the final deal.
The swap of some of the state properties, including the Transbay
Terminal, must be also approved by the state Transportation
Commission.
Hurwitz worked with feds
While Wheeler said the state had not consulted with Hurwitz over the
list, Garamendi said the federal government had worked in concert
with him for almost a year.
"He definitely knows what's being offered. There's been a winnowing
process," Garamendi said.
In fact, Hurwitz asked for certain properties, among them oil and gas
fields in Kern County, Garamendi said.
"These are producing wells," he said. "The geology in the area is
well-known and the valuation of the properties are standard. There is
an element of risk. That risk - up and down - is transferred to Mr.
Hurwitz."
Other swaps
The federal government also offered Hurwitz 2,967 acres in 52
scattered tracts of second-growth Douglas fir in Humboldt, Mendocino
and Trinity counties. The volume is estimated at 11million board
feet, enough for 1,000 homes.
In addition, the timber company Sierra Pacific, partly owned by Red
Emerson, who also is primary owner of Elk River Timber Co., would
receive 10,000 acres of lumber in four federal forests: Tahoe,
Stanislaus, El Dorado and Plumas.
Environmentalists generally oppose the redwoods-for-assets deal
because it leaves out thousands of other acres in Humboldt County,
including four ancient stands.
Also, they don't like the agreement because it allows Hurwitz to
reject it by the end of April if Pacific Lumber doesn't win a
favorable logging plan for its entire 200,000 acres of forests. The
deal also could fall apart if Hurwitz can't agree with the government
on the assets swap.
Many conservationists still hold out hope that banking regulators
will win lawsuits against Hurwitz and Maxxam for their role in the
$1.6 billion failure of United Saving Association of Texas in 1988.
If the suits are successful, environmentalists want the government to
take the whole Headwaters forest in a debt-for-nature swap.
"We still think debt for nature is the best way to expand the deal
and gain a measure of justice for the American taxpayer," said Jill
Ratner, lawyer for the Rose Foundation of Oakland.