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Acrimony in Hurdygurdy land deal

Questions raised over the prices paid for wilderness land

Del Norte County supervisor Gerry Hemmingsen says that the Smith River Alliance, a local environmental organization, is “fleecing” taxpayers on a multi-million-dollar land deal that placed thousands of acres of former timberland into public hands within the Smith River National Recreation Area.

Since August 2012, when the Smith River Alliance purchased 5,300 acres from a Washington-based timber group, the Agnew Company, the federal government has paid the SRA more than $3.3 million for over 3,400 acres of former timber lands in the upper reaches of Hurdygurdy Creek, Little Jones Creek and Siskiyou Fork watersheds — main tributaries in the Smith River basin. 

Money for the land purchases primarily came from the Land and Water Conservation Fund, which receives a portion of offshore oil and gas fee revenue for conservation projects. 

The alliance said it intends to ultimately transfer the remaining 1,900 acres to Six Rivers National Forest through a combination of sale and donation, when federal funding becomes available.

After submitting a public records request to the same county government that he helps to lead, Hemmingsen found out tthe SRA paid roughly $2 million for the entire 5,284 acres, which had an appraised value in January 2012 of $5.6 million.

“On behalf of taxpayers, I question how the Federal government justifies paying more than $3 million above the orignal sale price for the same property,” Hemmingsen wrote in letter to the editor that appears on today’s Triplicate Opinion Page. “That’s quite a gift to Smith River Alliance.”

James Webb, a lands specialist for the U.S. Forest Service who has handled the purchase from the SRA, said the feds have little flexibility in what they pay for real estate since the process is strictly guided by the 140-page Uniform Appraisal Standards for Federal Land Acquisitions.

“We can’t pay more or less — we have to pay exactly the same as the appraised value,” Webb said by phone. “Appraised value is what we pay.”

The Forest Service can accept donations of land, Webb said, and the Smith River Alliance has already gifted almost $50,000 worth of land during the last purchase in September, and the group “absolutely” anticipates donating more of the land, according to Grant Werschkull, executive director of the SRA.

In response to the “fleecing” reference, Werschkull said that since the alliance is a nonprofit, “whatever funds are secured above and beyond our expenses on this multi-year project will be used to provide for the long-term protection, restoration, and stewardship of natural resources in the watershed.”

He added that federal funding for a transaction regarding the rest of the land is far from guaranteed.

“It is very important to recognize that the (Land and Water Conservation Fund) process is very competitive and there are absolutely no assurances that additional funds will be received,” Werschkull wrote in an email.

Not a tree farm

Darrin Kasteler, vice-president of the Agnew Company, is in the fourth generation of a logging family with deep roots in the Pacific Northwest.

When his ancestors logged the land around Hurdygurdy, Little Jones and Siskiyou Fork in the 1960s, it was covered in old-growth conifers, including Douglas firs pushing eight feet in diameter, according to Webb.  But 60 years later, most of the timber is still far from marketable — growing half as fast as Agnew’s other timberlands in the region.

“It produces less than half of the board feet we produce in other places,” Kasteler said.  Additionally, logging regulations in California and Del Norte’s distance to operating timber mills led Agnew’s leaders to admit that “we just had to accept the reality that the best use of that land is not for us to operate a tree farm,” Kasteler said.

Other timber companies agreed. Agnew couldn’t even get another logging operation to make an offer on the property when it was put up for auction, which is why the company started to work with the Smith River Alliance to get the land into public ownership. 

Lost property tax

Shortly before the Hurdygurdy-Agnew land deal started to gain traction in conservation circles, the Del Norte County Board of Supervisors passed a “no net-loss” policy dictating that private lands could not leave county tax rolls without a land trade or compensation.

Since the county had received roughly $4,100 annually from the entire 5,300 acres, Agnew offered a sum close to 30 years’ worth of that tax, Kasteler said, but the county supervisors, “wanted us to write them a check for $2 million, which to me is extortion. They were absolutely awful.  It was the worst experience I’ve had in my profession.”

Kasteler said that his company offered a variety of compensation options, even going as far as to let the county choose land where Agnew would build gazebos or cabins that the county could rent out.

Instead, Kasteler said that the county supervisors insisted on $2 million or no support for the project.

Backers of the project, including U.S. Sen. Dianne Feinstein, got cold feet without county support, and funding opportunities started to look less promising.

“I came to the conclusion that we were going to have to sue the county, because they were blocking a private sale and they can’t do that.  And they did,” Kasteler said. “Frankly it was absolutely screwed up by those guys being greedy.”

Instead of filing suit, Agnew decided to cut its losses and sell the property to Smith River Alliance for less than half of what it originally thought they would make.

“We like money — we’re an investment company,” Kasteler said. “Would we have walked away from it if we thought there was a likelihood that we would’ve got federal money? No.”

Kasteler said it was unfortunate that the county leaders couldn’t value the land for its recreational values.

Hemmingsen said that there’s too much investment required by a cash-strapped Forest Service to rely on the recreation potential, and that recreation values are what caused an inflated appraisal to begin with.

“If you take it for recreational value, you’ve already gone in the hole,” Hemmingsen said.

Werschkull, who sees the land as crucial for the health of fish in the Smith River, home to some of California’s healthiest wild salmon and steelhead runs, disagrees, saying that public access is key to the county’s future economic health:

“Outdoor recreation, including travel and tourism, is the single largest part of our local economy and contributes hundreds of billions of dollars to our national economy,” Werschkull said.

Reach Adam Spencer at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it  

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