August 31st 1998

August 31, 1998

Ms. Hannah-Leigh Bull
7735 Black Mesa Loop Southwest
Albuquerque, New Mexico 87105

Dear Ms. Bull:

As I am managing the Fisher Family's investment in Mendocino Redwood Co, your letter of August 20th to Bob Fisher has been passed along to me. Thank you for taking the time to travel from Albuquerque to spend two days in Mendocino County. We are determined to help anyone who has an interest in what were doing here gain as much first hand knowledge as possible.

We respect your right to petition and raise your views among those of like-mind.

We believe that everyone gains when the environment gains.

In that spirit, let me comment on some of the specifics you mentioned in your letter of August 20, 1998.

The Fisher Family provided the bulk of the capital used to purchase Mendocino Redwood Company (MRC) in the belief that using a long-term investment horizon would allow MRC to operate with a high standard of environmental stewardship and operate as a successful business. MRC has been very well capitalized and is expected to sustain itself going forward.

Coho in Elk Creek

MRC, like many other people and companies, is interested in maintaining and increasing Coho salmon and their habitat on the north coast. For our part, we'll be constantly improving existing road structures (which are a source of sediment to streams and therefore potentially damaging to Coho habitat) as well as carefully managing stream zone buffers (many current harvest plans avoid harvesting in stream zone buffers). These practices provide for shade canopy retention and Large Woody Debris recruitment measures that surpass those of the current Forest Practice Rules. This approach will help the aquatic habitat for the Coho salmon and other species of fish. We'll also encourage habitat enhancement projects on the property.

Coho Monitoring Plan

MRC's goal is to complete a Habitat Conservation Plan for the long-term management of its aquatic habitat as soon as possible. This plan will likely include monitoring for the Coho and other fish species. The determination and approval of MRC's Habitat Conservation Plan for aquatic habitat has been slowed by a lack of resources at the National Marine Fisheries Agency. MRC is ready to work with National Marine Fisheries and other appropriate agencies as soon as they are available to provide input on MRC's plans. The process of completing a Habitat Conservation Plan for aquatic habitat will involve significant public input.

Restoring the Fishery

MRC is committed to improving aquatic habitat on it land. Since its recent formation, MRC has begun working in cooperation with two groups to improve its fisheries in a single watershed with high potential for Coho salmon restoration, and continues other restoration efforts. In particular:

1. MRC has begun working with Trout Unlimited to restore fish populations in the Garcia River.

2. MRC has begun working with local residents in Schooner Gulch to implement a $90,000 grant to repair road-related sediment sources in the Schooner Gulch.

3. MRC is continuing to cooperate with CCC's in the Rockport and Albion areas for stream survey and stream enhancement projects.

MRC plans to duplicate these efforts in other watersheds to further assist the Coho and aquatic habitat.

Wildlife Corridors

MRC's land spans 28 distinct watersheds in an area comprised of approximately 350 square miles. MRC uses its stream protection zones as corridors available to wildlife connecting these various watersheds. These corridors allow for wildlife movement from one drainage to another and were selected with input from in-house biologists.

"Destructive Timber Harvesting Plans"

MRC expects the health of the forests to improve under its stewardship. MRC uses a significant amount of selection management in its harvesting (taking some trees while leaving others), uses significant cable yarding in its harvesting (which minimizes ground disturbance), is harvesting in some manner only about 3% of its total acreage each year, and is expecting to annually harvest 2% to 2.5% of its merchantable inventory in the next several years (harvesting 2% of inventory is generally deemed to be a conservative harvest rate). MRC has practices in place to protect endangered species on its land and expects to demonstrate the wildlife habitat on its lands will improve over time as well.

MRC policies are intended to substantially improve the health of the forests and the standing inventory of trees over time. One measure of this is the average inventory of trees per acre. MRC expects this number in three or four decades to be 300% of what it is today.

As a matter of background, most of the lands owned by MRC were fully clear cut from the mid-to-late 1800's into the early 1900's. Logging practices at the time consisted of burning, clear cutting, dragging the logs down to the nearest river (often through the stream beds) and burning again. There have been a number of harvests since then that have concentrated on removing the highest value species of the day. The forests and streams are recovering from these past practices. Through responsible management, guided by a goal of restoring the conifer forest, this recovery will be accelerated.

Logging Levels

MRC conservatively estimates its harvesting at approximately 60% of the growth of trees on its property and in this sense is foregoing logging on significant volumes in the attempt to grow the forest for the future. This means the volume of trees will increase across our property each year.

At MRC's current harvesting levels, along with other log purchases, MRC and the related Mendocino Forest Products and Mendocino Wood Specialties employ approximately 450 people, constituting a direct payroll of approximately $12 million and an additional indirect payroll for loggers and truckers of over another approximately $5 million. A cessation to logging would eliminate most if not all of these jobs from the Mendocino County economy.

MRC's harvesting activities facilitate significant investment in its lands.

This includes funds for:

  • The relocation, redesign, and rehabilitation and repair of roads (which can be a source of sediments);
  • Converting predominantly hardwood stands back to planted acres of redwood and douglas fir;
  • Thinning of overstocked conifer stands;
  • Fire protection; and
  • Planting of lands that were historically conifer forest but are currently growing grass.

MRC is expecting to operate at 10% to 15% below L-P's average harvest rate of the last four years (which was substantially below L-P harvest rates from prior years) for the next several years but does not expect to cease logging altogether.

Logging Old Growth

While there are a number of definitions of old growth, MRC is managing for three definitions:

Un-entered stands of more than 20 acres (this is the California Department of Forestry definition of "late seral" forest), twenty acres of contiguous land that has not previously been logged.

Un-entered stands of less than 20 acres and previously entered stands (at least 5 acres) with at least six old-growth trees per acre - with old growth trees being more than 250 years old and greater than 48 inches in diameter at breast height.

Residual old growth, individual trees at least 250 years old greater than 48 inches in diameter at breast height that were for some reason not harvested previously.

MRC is developing a policy on old growth. While MRC's old growth policy is under development MRC is not harvesting in previously un-entered stands or previously entered stands with significant old growth representation (five or more acres with an average of six or more old growth trees per acre where old growth trees are defined as trees older than 250 years, greater than 48 inches in diameter at breast height in size.) MRC evaluates residual old growth trees on a case by case basis and attempts to preserve single old growth residual trees that have significant wild life value.

The Fisher family has invested in productive, growing forestland and related businesses as a good long-term investment and an opportunity to practice environmentally sound forestry. This investment was made with the understanding that we'll have a lot of explaining to do and that a great deal of trust will be placed in us to carry this out in a manner consistent with the expectations of the Fisher family. We care about this forest. We care about the environment.

We believe that those who know us and the Fishers, and those who come to know us and the Fishers, will understand our motives and intentions and will judge us based on what we accomplish in the forest. We hope you will too.

Thank you for writing. We will continue to stay in contact with you as we make progress toward our goals.

Sincerely,

Sandy Dean