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Letter to CDF re: Haupt Creek THP

Comments by Dr. Donald S. Kemp
on THP 1-00-484 SON – Haupt Creek

March 7, 2003

Forest Practices
California Department of Forestry
135 Ridgeway
Santa Rosa, CA 95401

Re: 1-00-484 SON – Haupt Creek, Wheatfield Fork, Gualala River

To the California Department of Forestry:

I am writing with respect to THP 1-00-484 SON (THP 484). I am concerned that this project is moving towards approval without due consideration having been given to many of its economic elements and, therefore, its implications for the property rights of the citizens of the State of California, Sonoma and Mendocino Counties and the communities of the Gualala River Watershed.

As far as I have been able to determine, the discussion thus far has not included even minimal economic due diligence with respect to its environmental/economic impacts. Furthermore, precisely because of the absence of economic due diligence, the property rights of the public have been materially and factually diminished to the benefit of those of the owner of record for the property, Mr. Harold Richardson. I respect Mr. Richardson’s property rights, but they are not absolute. The public also has legal property rights when it comes to natural assets such as old growth forests. The public is completely dependent upon agencies such as California Department of Forestry (CDF) to protect its natural assets in conflicts with private interests. How can CDF possibly represent that it has protected those rights without even attempting an economic assessment of the environmental impacts of this project?

I believe that in the case of projects such as this one, every step must be taken to identify and monetize all environmental, health, recreational, aesthetic, communal, historical, cultural and economic impacts. The characteristics of the land upon which the old growth portions of this plan are situated as well as their status as old growth make this diligence critical to its evaluation and to an assessment of the property rights of the public. No cost should be assumed away and relegated to the intangible category of “externalities”. The consequences of incomplete diligence have been devastating in the past. The misallocations of resources and abrogation of public trust responsibilities resulting from previous incomplete diligence are enormous for the Gualala Watershed. Any decisions made with respect to this property must carry its entire current and discounted future economic burden. While this sort of diligence was difficult in the past, credible methodologies have evolved over the past few decades that permit a realistic assessment of the economic values of impacts previously deemed to be non-quantifiable externalities. Any private proposal, such as this one, that puts the few remaining old growth assets of Sonoma County at risk must be required to assess these risks in a way that makes economic due diligence possible. Only then will it be even possible to exercise public trust responsibilities with respect to the public’s property rights.

A completely privately funded environmental and economic assessment is the only way that THP 484 can meet minimum standards of economic justice. This diligence is a necessary condition to permit any public agency having related jurisdiction to fulfill its Public Trust obligations to its many constituencies.

This project will require a thorough EIR, CEQA and possibly other impact studies that will, in turn, enable an economic assessment of these impacts. This assessment will culminate in a public evaluation of a choice between either the incorporation of steps to entirely mitigate all negative watershed impacts or a direct monetary compensation to the communities affected. In other words, this project must be an arms length transaction. Anything short of this would constitute an unapproved subsidy by the affected communities to Mr. Richardson.

I am a Ph.D. Economist with 25 years of practice as an Investment Banker. Most of my career on and around Wall Street was spent managing groups whose primary role was to undertake due diligence of investment proposals. I am a fulltime resident of The Sea Ranch (just South of the Gualala River in the Northwestern corner of Sonoma County) since retiring from The Business 18 months ago and moving here from New York City. While I have become an active member of the fulltime community only recently, I have been spending time on and have had property interests on the Sonoma-Mendocino Coast for 20 years.

It is my objective to work to make certain that the proposed THP 484 meets credible standards of economic and public trust diligence. I have compiled a network of seasoned Environmental Economists, Financial Analysts and Community, Environmental and Public Service Groups to assist in these efforts. I have already notified these groups of my intentions and asked for expressions of willingness to participate in this diligence process. We expect that the final decision regarding THP 484 will be made within the framework outlined in this letter. Furthermore, we are ready to lead or assist in this process.

Donald S. Kemp

California Senator Wesley Chesbro
California Assemblymember Patty Berg
California Assemblymember Patricia Wiggins
Dr. Andrea E. Tuttle, Director, CDF
Supervisor Mike Reilly
Sonoma County Board of Supervisors
Supervisor J. David Colfax
Mendocino County Board of Supervisors