Abalone wars: Harbor dispute settled

Adam Spencer, The Triplicate

Twenty-five barrels of abalone shells occupy the west side of a building on Whaler Island, a bitter reminder of the messy demise of a local abalone farm. The iridescent shells are all that remain of the last crop of an operation, once prized in industry circles, that grew up in Crescent City Harbor.

Abalones, also called sea snails, are mollusks prized for their meat. They can be grown in tanks or cages, clinging to submerged panels like they would on rocks in the ocean.

"You're looking at close to $400,000 worth of abalone that died because of the lack of dredging," former abalone farmer Chris Van Hook said during a recent tour of the place, reiterating an argument he's made since 2001 - often in legal venues with the Crescent City Harbor District.

Van Hook and his affiliated businesses (Abalone International) won a

$1.1 million dollar arbitration award against the harbor in 2005. The

district had contended that the abalone farm went under from more than

just a lack of dredging, pointing to an "anchovy invasion" in the summer

of 2001. The district also disputed, then and now, whether it had a

legal responsibility to dredge the leased area of the floating farm.

While disagreement remains, the legal battle is over: the two parties

agreed to an early termination of Van Hook's lease (which was to expire

in 2041) for a price of $235,000. Unlike the insurance-covered

arbitration award, this will come out of the pockets of a cash-strapped

harbor.

"I actually think this an exactly fair price," Van Hook said at a

recent Harbor Commission meeting after the panel's unanimous vote to

buy out his lease.

Harbor district attorney Bob Black said that "it seemed like the best

business" move since further arbitration would probably have cost the

district more than $235,000 even if it won, and this deal will "bring

about peace in the valley for the next 30 years."

'Sushi grade' abalones

Abalone farming was in the cards for Van Hook from the start. While

studying for a bachelor's degree in environmental studies from the

University of California at Santa Barbara, a hot spot for abalone

research in the state, he conducted projects in abalone culture,

including raising abalones for farms in Bodega Bay.

"Chris was Mr. Abalone himself," said former City Councilman Michael

Scavuzzo, who helped Van Hook maneuver through local politics to develop

his business.

After college, he explored possible locations for a farm from Baja

California to Vancouver, British Columbia, finally settling on Crescent

City's protected harbor with its rocky bottom and oceanic conditions.

"The harbor used to be a vibrant nursery for ocean fish," he said.

"You would catch lingcod, perch, cabezon, right in the inner harbor."

When he started his farm in 1987, almost all abalone farms were based

on land, but when abalones grow to be more than 2 inches in diameter

they need more water, and the pumping costs for land-based farms spike.

Red abalones were the species raised because they are the fastest-growing and largest.

Van Hook's innovation came in the form of cages that hung from a

floating dock in the outer basin. An aeration system ran underneath.

"We raised the small abalone up on land where it was efficient to do,

so then we finished growing them in the water where we didn't have that

pumping cost and they had ample water flow with our aeration," Van Hook

said. "So we were the most cost-effective, efficient abalone farm known

in the world actually."

The tasty mollusks with ear-shaped shells grew on interchangeable

panels that could be easily transferred form the on-land to the in-water

cages.

The panels were spaced apart by about 5 inches in the cages. Bull kelp would be shoved between the panels to feed them.

The only permit to harvest bull kelp in California north of San

Francisco was held by Van Hook, he said, adding his abalones were

frequently rated as "sushi grade" by Japanese chefs and "number one" in

Hong Kong.

"All of our market was domestic, but we would occasionally have to

ship them to Japan and Hong Kong so the 'master chefs' there could taste

them and approve them before they could be served in their branch

restaurants here in the United States," Van Hook said.

The farm gave hundreds of tours every year. Visitors came from

Iceland, Chile, Japan, China, Hong Kong, British Columbia and Mexico,

clamoring to get a look at "the single largest in-water abalone farm in

the world," Van Hook said.

He was even asked to help develop a farm in Chile.

It was truly a family business with Linda Van Hook, Chris' wife,

handling the marketing, shipping and accounting. Their sons helped

around the farm while growing up.

Over time, the Van Hooks and their investors put $2.25 million into the Crescent City lease property, he said.

The company spent about $500,000 a year at local hardware stores to keep the mollusks in the water.

"They had a thriving business there," Scavuzzo said. "It was a success and it's unfortunate about what happened."

Beginning of the end

According to the "Final Award of the Arbitrators," the harbor ceased regular dredging sometime in late 1996.

"Between 1997 and 2001, while he served as a Commissioner and

thereafter, Van Hook continued to urge the District to resume dredging

for the benefit of all users of the Harbor," the award states.

Beverly Noll, who was president of the Harbor Commission at that

time, said that dredging was hindered by regulatory hurdles in getting

the right permits for different harbor zones.

"Nobody wanted to stop dredging," Noll said.

In February 2001, Van Hook discovered caked mud in abalone cages

suspended from a floating dock in the outer harbor. He said he had been

agonizing for months over why his crop was dying, but it wasn't until

he was feeding the abalones in the low winter tides of 2001 that he

noticed them sitting in the mud and realized the reason for their slow

decline.

According to the Final Award, Van Hook wrote certified letters to the

CEO of the district at that time, Rich Taylor, about the emergency. But

the harbor had let its dredging permits expire. There was little it

could do.

In June 2001, Taylor went to San Francisco to make a plea for the

dredging permits because of the emergency at the abalone farm, the award

states.

The permits were granted and dredging commenced at Fashion

Blacksmith. The dredge crew prepared to dredge the abalone farm next,

when, according to the Final Award, "the crew was ordered off the job."

Noll said there was no order to stop dredging.

"There was no deliberate attempt by anyone at that time to deny dredging that part of his lease area," she said. 

Although most of the events transpired before the tenure of current

Harbormaster Richard Young, he represented the district at the

arbitration hearings.

Young said he finds it "offensive" that the arbitration documents

make it appear as if the harbor management called the crew off the job

after being set up to dredge the farm.

"The harbor has a clear contractual obligation to dredge at Fashion

Blacksmith. We didn't have that clear contractual obligation at the

abalone farm, but we had the intent to do it. Then the anchovy die-off

occurred."

The anchovy "invasion" refers to massive schools of anchovies that

swam into the harbor, a common occurrence every few years. Usually they

swim in and then out days later, but in 2001 thousands of anchovies

consumed all the oxygen in the water, then died, creating anaerobic

conditions that killed off the remaining abalones.

Since all of the abalones had already died from the anchovies, Young said, the harbor didn't see the point in dredging.

Van Hook said that the die-off occurred because of a shallower, oxygen-poor harbor, once again, from the lack of dredging.

An anchovy invasion in the early '90s didn't affect his farm at all, he said.

A job for a lawyer

Soon after the demise of his farm, Van Hook got his law degree online from Concord Law School.

"I started thinking I'm going to need to hire an attorney and no

abalone farm has money for an attorney so I got online and said, 'Okay, I

guess I'll become one,'" Van Hook said.

He framed his arguments while taking classes and passed the Bar on his first try.

Ultimately, his efforts led to the $1.1 million award in 2005 from

the panel of neutral arbitrators and confirmed by a federal judge.

The findings of the arbitration panel include: "By not dredging, the

District breached both the terms of contract and the covenant of good

faith and fair dealing." and "Further, the District was negligent in

failing to dredge."

When the harbor district asked that the award be thrown out, the

request was denied by a judge, and the harbor ended up paying another

$43,050 in attorneys' fees and interest on the original award.

The harbor's insurance company covered the award, but the two sides

continued haggling over whether sufficient dredging was being done.

The harbor could never have afforded the millions of dollars it would

have taken to dredge the outer boat basin to the extent that Van Hook

said was necessary, Young said.

Now, the harbor district is ready to move forward.

"We want to move on and get a successful business in there," Young said.

Van Hook, for his part, is also looking forward to putting the ordeal behind him.

"It's too negative for me," he said.

And although he's successful in his new venture of certifying organic

farms, including medical marijuana ventures, he still wonders what

could have been.

"I thought I was going to die an abalone farmer," he said. "This was my life-long career."

An abalone heritage

Even today, many of the abalones found off Pebble Beach could have come from the Van Hooks' farm.

Abalone International sold 3andfrasl;4-inch abalones to the Del Norte County

Abalone Replant Program, then local divers and fishermen would plant the

shellfish on county shoreline. About 50,000 abalones were planted

locally.

The program was funded by county fish and game fines.

The Van Hooks used their farm as an educational asset for the community, offering field trips and internships.

Paid internships were given to the "best drafting students" from Del

Norte High to draw blueprints of new docks, buildings and cages that the

business had built, Van Hook said.

For 10 years, abalone field trips were offered to the aquaculture and

commercial fisheries classes of Humboldt State University and College

of the Redwoods.

"This was one of the most popular field trips," Van Hook said.

Reach Adam Spencer at spencer@triplicate.com .

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