Political Debate Surrounds Pacific Lumber

IF Hollywood ever decides to make a film about a company town, this is the place to come to. From the trim, look-alike homes in matching colors with neatly landscaped lawns to the elegant Scotia Inn, from the elementary school named after a company founder to the medical clinic, the Pacific Lumber Company owns it all. Some workers here are third-generation, and their children all get college scholarships from the company. Nestled along the Eel River with redwoods all around, Scotia and its 1,000 or so residents are here because Pacific Lumber's headquarters and its two mills are here. That's been the purpose of the town since 1887.

Now this quiet company town is also at the center of a controversy over the logging of redwoods and the protection of old-growth forests. Pacific Lumber is the largest private holder of such forests.

For decades, the company cut conservatively. It logged selectively, rather than clear-cut, on its 193,000 acres of forest land. It worked with conservation groups to preserve groves of ancient trees. It had a good reputation with environmentalists.

Then, in 1985, the company was taken over by Maxxam Inc., a Houston conglomerate. To pay off the $754 million in junk bonds arranged by Drexel Burnham Lambert Inc. to finance the hostile takeover, Pacific Lumber under the new ownership doubled its rate of cutting to about 350 million board-feet a year.

Pacific Lumber president John Campbell defends the stepped-up harvest plans as environmentally as well as economically sound. Recent land surveys show company lands actually have 30 percent more timber than had been estimated, he says. Even with the increased cutting, Pacific Lumber impacts only 5 percent of its land base each year; 90 percent of all logging is selective; the company plants about 500,000 seedlings a year and does no clear-cutting in old-growth groves.

``There's plenty of forest out there,'' said the big, friendly transplanted New Zealander, who worked his way up through the company over the past 22 years. ``Our consulting foresters told us that if we doubled our harvest rate for 20 years, and also converted old-growth forests to a growing state, that would put us into sustained yield in perpetuity.''

Measured in board-feet, says Mr. Campbell, virgin forests decline about 3 percent a year. Young, replanted forests are increasing by 7 percent a year. Shifting its lands to second-growth ``would lead to a younger forest, but one which is much more vigorous and productive.''

To a biologist or environmentalist, however, vigor and productivity may be defined differently - in terms of animal habitat or the clarity of streams.

AT the moment, the focus is on the Headwaters Forest, 3,000 to 4,000 acres of old-growth redwoods owned by Pacific Lumber. The company has declared a two-year moratorium on cutting there, but eventually it wants to harvest the forest. State agencies have rejected those plans, and the issue now is in court.

Meanwhile, Gov. Pete Wilson has proposed a $300 million bond issue for the 1992 ballot which would be used to buy the Headwaters and other forest lands.

The House National Parks and Public Lands Subcommittee will hold hearings later this month on a bill to protect 200,000 acres of redwoods in Humboldt County. Spearheaded by Rep. Pete Stark (D) of California, the bill has 20 cosponsors and includes protection for the Headwaters.

About 10 percent of Maxxam's debt in acquiring Pacific Lumber (now down to about $500 million) was held by Columbia Savings and Loan, a failed Beverly Hills, Calif., S&L now controlled by the Federal Resolution Trust Corporation. Some politicians and environmental groups have proposed a ``debt-for-nature'' swap, in which the US government would sell the bonds to the state at a reduced price. California would then retire that part of Maxxam's debt as partial payment for the Headwaters.

Determining the fair market value of the Headwaters would not be easy. Estimates range from $100 million to $500 million. Then there's California's $14.3 billion budget deficit and whether voters want to pay for another bond measure. Last year, they rejected the ``Forests Forever'' initiative, which called for $710 million in bonds to buy up old-growth stands.

California lawmakers are considering a package of bills that would limit redwood logging. The measures would reduce maximum clear-cuts from 120 acres to 20 acres and require buffers as large as the clear-cuts themselves, ban clear-cutting in ancient forests, and limit annual harvests to 2.2 percent of inventory.

The timber industry says this would cut harvests 60 percent and cost three counties in northern California 17,400 jobs, $492 million in annual payroll, and $64 million in state and local taxes.

The four sponsoring state senators gave interested parties until May 31 to submit ``scientifically responsible and politically realistic legislative proposals,'' which are now under review.