January 23rd 2008

By Mike A'Dair/TWN Staff Writer
The Willits News
January 23, 2008

Supervisors have unanimously approved a letter of introduction to Humboldt County supervisors for Mendocino Redwood Company.

The letter is to be used to aid the Humboldt board in its efforts to influence the outcome of the Pacific Lumber Company (PALCO) bankruptcy hearing currently underway in Texas.

Pacific Lumber Company filed for bankruptcy in January 2007; Mendocino Redwood Company (MRC) offered to purchase PALCO in December for $500 million.

PALCO, whose main offices are located in Carlotta, has been a timberland owner and lumber producer in Humboldt County for 136 years. For decades it logged its lands at roughly 2 percent of inventory per year and was known for its high-quality timber products and well-maintained lands.

It was purchased in 1985 by Maxxam Group, Inc., a subsidiary of MAXXAM. Management philosophy soon changed, and the company became embroiled in several lawsuits with environmental organizations. It also entered into a period of confrontation and difficult negotiations with state resource agencies.

In March 1999, it sold 7,400 acres of its virgin timberlands--the Headwaters Forest--to the federal government for $410 million.

In its letter of introduction, Mendocino County supervisors touted MRC's management philosophy, noting the company has eliminated traditional clear-cutting; has adopted an ecologically-based old-growth policy; has sought and obtained Forest Stewardship Council certification for excellent forestry; has reduced harvest levels from those practiced by the former owner Louisiana Pacific; has increased its standing inventory on 232,000 acres of timberland by 600 million board feet (or approximately 2,580 board feet per acre, a roughly 33 percent increase in timber inventory over nine years); and has "rebuilt working relationships with its neighbors, environmental groups, regulators and other stakeholders in Mendocino County."

Supervisors Michael Delbar, John Pinches and Jim Wattenburger expressed their gratitude to the company for the contribution it has made to the local economy.

Pinches told MRC President Mike Jani to let him know if he or if the board of supervisors could do anything else to help MRC's chances.

Two other offers are currently under consideration for the property. One is from a consortium of six environmental organizations and Bank of America to purchase the timberlands and implement a low-cut management philosophy. The other is from MAXXAM, which would sell off some of the company's lumber mills and allow residential development on some timberlands.