North Coast Journal WeeklyIn the News

December 6, 2001

Who's buying the Daly complex -- and why

Headwaters $$ meet Dec. 11

PL closes last Scotia mill

Bonds for Eureka schools

Shakeup at hospital

Arcata official charged

Millionaire fugitive caught

Four members for water board

'Cinder-Elta dead at 93

Board OKs grants, donations

Balloon buildings going?

Who's buying the Daly complex -- and why

Eureka's Redevelopment Advisory Board invited the public and the press on a tour of the historic Daly building complex last week and to meet the man who may become the property's new owner.

Dan Ollivier is in negotiations with the building's current owner, the Humboldt State University Foundation, which bought the property in 1998 using a $700,000 interest-free loan from the Eureka Redevelopment Agency.

Ollivier declined to comment on financial details, describing negotiations as "still liquid." But Ollivier did identify his primary interest in the property: Parking.

The developer's plans call for tearing down the oldest portion of the complex, the original Daly's Department Store, built in the 1890s at Fourth and F streets, to create 38 parking spaces. Ollivier already owns the newly remodeled Gross Building -- Johnson's at Fifth and F streets and adjacent to the original Daly's --he needs parking for future tenants of the Gross.

[architectural drawing of Daly's complex proposed redesign]Ollivier is looking at the Daly's complex, which covers half a city block in the heart of Eureka, as three distinct structures. He said he is interested in developing only the newer portion of the Daly store, an addition constructed in the 1960s at the corner of Fourth and G streets. He declined to comment on future uses of that commercial space, but said that portion of the building is structurally sound.

The third portion of the Daly complex, known as the Sweasy Building, houses the old State Theater. On the tour Ollivier said he was not interested in developing the theater, but that he would work with anyone who could make it happen.

According to Eureka City Manager Dave Tyson, the reason for the tour was "to make everyone aware of the state of the building."

"We wanted the [Redevelopment Advisory Board] to have a sense of what's going on inside," he said. In fact, many on the tour were alarmed at the stench of mold and rot and the visible water damage inside.

"It has really deteriorated," said Charlotte McDonald of the Eureka Main Street Program. "And it's not just the interior. The exterior is just terrible," she added, pointing to the ornate façade on the Sweasy Theater that has visibly buckled in the last few years.

"We recognize that the building is something the community wants to preserve, especially the theater," said Tyson in an telephone interview Tuesday. "Does the city have the resources to do it? No, not at this time. But it is important that some control be taken over the asset."

Tyson said building officials who are knowledgeable about development and preservation are quite concerned that the theater was starting to show signs of significant deterioration due to neglect.

"It's important that someone step up and at least move toward preserving the building. I think that's something the city could do. What we're talking about is securing the roof and some of the façade and putting heat back in the building."

Tyson and McDonald fault the university for failing to adequately maintain the structure since it took over ownership three years ago.

Don Christensen, Humboldt State's vice president of development and administrative services, takes credit for putting the Daly purchase together, but he is not eager to take the blame for the building's decline.

"We spent a lot of time cleaning up," Christensen said. "We carted out something like seven or eight dumpster loads of trash that was left behind. We had to maintain a lot of things for our insurance carrier to keep the coverage. We spent a lot of money replacing windows in that building, satisfying insurance stipulations."

The leaking roof?

"It was leaking when we acquired it," said Christensen. "Our plant operations people went down and did some patching and repair on the roof. But understand, you don't want to put a lot of money into a building that you knew that some of it was seismically unstable and you were going to demolish anyway."

While the university's plans, which were abandoned last year due to inadequate funding, did not call for a complete demolition of the original Daly building, Ollivier's plans do. That's what concerns Mary Ann McCulloch, president of the Eureka Heritage Society.

"Here we go again," said McCulloch, referring to the recent battle over the planned demolition of buildings a block away to provide parking for developer Kurt Kramer's refurbished Professional Building. (See Journal cover story, "Are these buildings historic -- or just plain old," Sept. 13)

McCulloch sees a pattern with developers receiving redevelopment money to work on a building. "And then it's, `Oh, my God, we have to find them parking,' so down comes a [historic] building.

"It's a short-sighted kneejerk reaction, something that has to happen quickly or it's going to put a developer in financial straights," McCulloch said. "The city feels obliged to help them because, of course, revitalization helps the city. But there's no long term thought, no foresight 10 years down the road."

Will the building's demolition require review by the city's Historic Preservation Committee or other entities?

"Probably not," said McCulloch, who concedes that she and the Heritage Society may not have any say about the future of the Daly Building.

Headwaters $$ meet Dec. 11

Humboldt County's economic development staff is charting a course for the $22 million Headwaters fund, and it points directly at a 1999 economic development plan.

As part of the 1999 purchase of the Headwaters Forest property from Pacific Lumber Co., Humboldt County received the money from the state and federal government to replace timber yield taxes and other lost revenue. A consensus emerged during community development meetings last year that the money should be spent for economic development -- but not how.

A draft charter plan, released Nov. 20 and slated for a hearing before the Humboldt County Board of Supervisors next week, recommends the money be split up into three different parts -- $5 million to create an investment fund for large grants, $8 million for a revolving loan fund, and the remainder to a liquidity fund, with the interest used for smaller community grants. The money would be administered by the Board of Supervisors guided by a community advisory board.

The draft plan refers to the 1999 economic development document, called Prosperity! The North Coast Strategy. That document identified nine industry clusters that form the basis of Humboldt County's economy, including dairy, timber, tourism, research, arts and manufacturing.

During public meetings last year, county officials learned that citizens not only wanted the fund principle to remain intact, they also wanted the Headwaters money to have an immediate impact. Debets said that's a tall order.

"We want it to make a difference, but we want [the Headwaters money] to be in the community forever. There's no model for that."

The draft charter is available online at Prosperity! is available on line at

The public meeting on the draft plan will be Dec. 11 from 7-9 p.m. in the Wharfinger building, 1 Marina Way, Eureka.

PL closes last Scotia mill

The last mill in Scotia went silent last week as Pacific Lumber ceased operations at Mill A, leaving 140 workers without a job. The company said the move was necessary as part of a restructuring strategy that would end years of unprofitability.

PL placed the blame for its financial losses -- more than $200 million over the last three years, according to statistics -- on the Habitat Conservation Plan agreed to as part of the 1999 Headwaters Agreement.

"The HCP is not working," said PL spokesperson Mary Bullwinkel. She said the plan had been agreed to by the company as a means of establishing some certainty and predictability in the regulatory process. That has not happened, she said.

The HCP has caused two problems for the company, according to a letter from Robert Manne, PL's president and CEO. The biggest difficulty for the company is the loss of harvestable land. In the letter, Manne said that 62 percent of PL's forest volumes have been put off-limits by habitat protections.

"Over $500 million of our valuable timber assets have been withdrawn from operations by these restrictions," Manne said.

PL also maintains that rising logging costs have also contributed to its financial woes. According to Manne's letter, logging costs have more than doubled since the HCP's implementation.

Not everyone believes that the HCP is the cause for PL's losses, however. Paul Mason, executive director of the Environmental Protection Information Center, said he "does not buy that they have a lack of logs."

Under PL's Sustained Yield Plan, also agreed to as part of the Headwaters agreement, the company can only harvest 178 million board feet a year. This year, it is expected to harvest an amount close to that limit --170 million board feet.

Bullwinkel said the harvest level this year was an anomaly. Harvest levels had been as low as 100 million board feet in 1999 and were likely to dip again in the future. "We're running out of places to place timber harvest plans," she said.

The real reason for Mill A's closure was a business decision, Mason said. Mill A was an older mill designed to process large-diameter logs. Because the company cannot harvest old-growth forever, "they'll need to operate with newer equipment" meant to process smaller logs.

The company is blaming the HCP because it "increases its bargaining position," Mason said. "They can say the agencies have been so unreasonable that they are shutting down mills."

And there are in fact negotiations over the HCP on the horizon. PL has submitted a packet of proposed changes to state and federal regulatory agencies. Bullwinkel declined to comment on the substance of those changes, other than to say they "would certainly help" the company's financial position.

The backdrop to the debate over why PL had to close the mill is a deteriorating market for timber products, especially redwood.

"Prices are certainly down, and there are substitutes being developed for redwood," said Steve Hackett, a professor of economics at Humboldt State University. Products like synthetic decking are making it harder for the redwood niche economy.

That does not mean that the HCP hasn't hurt PL's bottom line, Hackett said. "As an outsider looking in, I don't feel I have enough information to make that call."

What he does know is that the town of Scotia, entirely owned by PL and populated with PL workers, has lost much of its economic base this year. "The concern -- and that is different from a prediction -- is that you will see the same thing here you saw in other boom-bust towns. It's a very dangerous and scary thing for that community, because they have all their eggs in one basket.

"If you're in county economic development right now, you'd have to look at Scotia and think seriously about some economic development alternatives for that area. The risk if you don't is that there will be a permanent long-term decline. And you don't want to sit on your hands too long. There's a long lag time between starting those programs and seeing an effect."

Economic development isn't something PL has even considered yet, Bullwinkel said. "Right now, our focus is just on getting the company economically viable so we can stay in business."

Bonds for Eureka schools

Eureka City Schools, citing a need for school facility improvements, will put a pair of bond issues totalling $43 million on the March 5 ballot.

The bonds, approved unanimously by the district's board Nov. 27, would help pay for safety improvements, modernization and seismic retrofitting. The $43 million would be matched by more than $16 million in state money.

The school system will be hosting tours of the facilities Dec. 8 for residents who would be affected by increased property taxes. See this week's Calendar for details.

Shakeup at hospital

An administrative shakeup at Mad River Community Hospital Nov. 30 resulted in the termination of at least two employees, including Charlene Pellatz, director of ancillary services and a 21-year veteran of the privately-owned hospital. Also gone is Stacy Kadle, assistant to hospital Administrator Doug Shaw.

Neither Pellatz nor a hospital spokesman would say if the two were fired, resigned or were retiring.

"I just want to say I've had so many pleasant years at Mad River. It's a great group of managers and there are so many wonderful employees," Pellatz said. "It's a sad day."

Arcata official charged

Alex Casillas, Arcata's former superintendent of public works, was charged this week with crimes related to the illegal dumping of asphalt emulsion on city property last May.

Casillas allegedly ordered city employees to bury a large amount of the toxic substance at a piece of city property located at Arcata's southern edge, just 50 feet away from Humboldt Bay. The emulsion has since been removed and testing has shown that the bay was not polluted by the emulsion.

He now faces a four-count misdemeanor complaint. Humboldt County District Attorney Terry Farmer said in a press release that Casillas is being charged with illegal disposal of hazardous waste under criminal law and water pollution under the Fish and Game code.

Casillas, who was fired by the city in May, did not respond to queries for this report.

Millionaire fugitive caught

A nationwide manhunt for a millionaire fugitive who lived off and on in Humboldt County for the past seven years ended Nov. 30 with his arrest for shoplifting in a small town in Pennsylvania, just one day before his case was broadcast on America's Most Wanted.

Robert Durst, 58, allegedly stole a sandwich, a newspaper and a Band-Aid even though he had $500 in cash on him at the time of his arrest.

Durst is wanted in Texas on charges of beheading a 71-year-old man. New York investigators are hoping to interview him about the disappearance of his wife 19 years ago. Police in Los Angeles are investigating the murder Christmas Eve of Susan Berman, a close friend of Durst, who made her living writing about organized crime.

The Journal reported last week that Durst sold his house in Trinidad last year and continued to rent in the area while planning to build a new home. He was reportedly sighted in mid October by a campground manager near Salyer. However, police called it an unconfirmed report.

Durst was arrested Oct. 9 in Galveston, Texas, and released on bail the next day. A nationwide manhunt was launched Oct. 16. Police traced his flight route from New Orleans to Maryland before his arrest in Bethlehem, Pa., Friday.

Four members for water board

Gov. Davis ended a standstill at the North Coast Regional Water Quality Control Board Nov. 30 when he appointed four new members to the board.

The agency deals with pollution that negatively affects the "beneficial uses" of the North Coast's waterways, including sewage, agricultural runoff and silt from timber harvesting activities. For months, the board has lacked a quorum and has been unable to take official action.

Two of the new members are from Humboldt County: John Selvage of Eureka and John Corbett of McKinleyville.

Selvage comes to the board with extensive experience in environmental engineering -- in fact, he helped found Eureka's SHN Consulting Engineers and Geologists.

Corbett is trained as an attorney and has been the general manager of the North Coast Co-Op for two decades. He is retiring from that post and running for 5th District Humboldt County supervisor. This appointment would not conflict with his campaign, Corbett said.

Selvage and Corbett join fellow Humboldter Dina Moore, appointed this spring, on the board. The other board members appointed Nov. 30 were Richard Grundy of Santa Rosa and Shawn Harmon of Ukiah.

The water board has been at the center of a controversy over Pacific Lumber Co.'s timber harvest practices. The board's staff has been consistently critical of the PL's science and has recommended the company be required to conduct water monitoring on its harvests.

`Cinder-Elta' dead at 93

Elta Cartwright, one of the greats in Humboldt County sports history, died Nov. 29 in Fortuna.

Cartwright, who earned the name "Cinder-Elta" for her performance in the 100-meter dash on the cinder tracks, went to the 1928 Olympics for that event. She went on to become the first female athlete to be named to the Humboldt State Sports Hall of Fame.

Board OKs grants, donations

Grants and donations approved by the state's Wildlife Conservation Board Nov. 28 will protect more than 600 acres of Humboldt County for wildlife preservation.

By far the largest chunk of land is the South Spit of Humboldt Bay. The 598-acre donation by Pacific Lumber to the state was approved by the board. The land, which contains habitat for snowy plovers and endangered plant species, will be overseen by the Bureau of Land Management.

The board also granted $606,000 to Sanctuary Forest, Inc. for the purchase of 40 acres just north of Whitethorn, and $75,000 to the Jacoby Creek Land Trust for a conservation easement for about 10 acres along Jacoby Creek.

Balloon buildings going?

Union Pacific railroad, owners of the undeveloped parcel near downtown Eureka known as the Balloon Tract, has requested permission from the city to tear down eight buildings on the land.

The buildings, among them the blacksmith shop, carpenter shop, radio shack and car shed, are being destroyed because of "unauthorized occupation," said Sidnie Olson, senior planner with the city. Homeless individuals often camp out on the parcel (see "Finding Beauty in the Blight," Oct. 11).

The demolition requires a coastal development permit. The city will vote on the permit at the regular council meeting Dec. 4, after press time. n


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