Partnership bidding for Pacific Lumber
By Mike Geniella
The Press Democrat
January 16, 2008
A consortium of conservation groups and private investors including Save the Redwoods League and the Bank of America announced Tuesday it will make a bankruptcy court bid for control of Pacific Lumber Co., and nearly 210,000 acres of prized North Coast timberlands.
With only two weeks left before a Jan. 31 bidding deadline in a federal bankruptcy court in Texas, Tuesday’s announcement was the latest twist in a timber industry saga spanning two decades.
At stake is the fate of Pacific Lumber, a 136-year-old aristocrat among West Coast timber companies struggling to survive.
The new proposal, involving an unusual public-private partnership, will compete with two already announced plans: a $500 million buyout proposed by Mendocino Redwoods Co. of Ukiah and a New York investment firm, and a reorganization plan by Pacific Lumber’s current Texas-based corporate owner which includes selling off company assets and opening up some land for development.
As outlined, the latest proposal offers no financial specifics but calls for the preservation of 12,000 acres of old-growth redwoods in southern Humboldt County while another 197,000 acres would be put under a permanent conservation easement and logged selectively to pay off debt.
Besides Save the Redwoods League and Bank of America, proposed partners include the Nature Conservancy, Conservation Forestry LLC, Redwood Forest Foundation Inc. and Atlas Holdings LLC, an East Coast-based investment group that operates three wood products mills, five paper mills and several packaging plants across North America.
Redwood Forest Foundation last summer purchased about 50,000 acres of privately owned coastal Mendocino County timberland for $65 million in a deal financed by Bank of America.
About the same time the Nature Conservancy purchased 161,000 acres of forestland in New York state for $110 million with the help of Atlas Holdings.
The deals underscore a new trend in timberland management involving public-private partnerships.
Advocates contend they allow huge tracts of timberlands to be preserved, while allowing some logging to generate income while keeping local mills open and employees at work.
Questions have been raised about the growing role of government subsidies, however, since conservation groups typically rely on state or federal grants and/or tax-exempt philanthropic contributions.
Mendocino Redwood’s privately financed proposal would represent a $250 million investment by San Francisco’s Fisher family, founders of the Gap clothing empire and other ventures.
No public money would be involved. Because of the company’s reputation and economic resources, some industry leaders believe its proposal may have the edge in bankruptcy court proceedings.
Still others, however, believe there’s a long-term public benefit to a private-public partnership.
Art Harwood, a Mendocino County mill owner and director of the nonprofit Redwood Forest Foundation, said under the new plan the Pacific Lumber timberlands ultimately would end up in “community ownership.”
“I don’t think anyone is against a Mendocino Redwoods Company ownership. We’re just putting up another option,” said Harwood.Posted in PALCO | Tagged HRC, MRC |