A Strategic Property

Harbor District land deal sparks allegations of 'political motivations'



The Humboldt County Harbor, Conservation and Recreation District recently closed the purchase of a 16-acre property neighboring the old pulp mill site that has become a lightning rod in the district's looming election.

The district purchased 16.5 acres from Freshwater Tissue Co., the same company from which the district acquired the mill site in 2013, for almost $600,000. The property is lynchpin to the district's future plans of developing the old mill site, as it allows another access road to the mill, increased upland storage and, eventually, the potential for the district to build a much-needed shipping dock on the bay.

But an unanticipated month-long delay in what the district expected to be a rubber-stamp approval by the Humboldt County Planning Commission has some involved crying foul, charging that electoral politics almost railroaded the deal. "It's all about the politics of these days right now," said Harbor District CEO Jack Crider. "The election has been pretty brutal, and this was the start of that whole thing. There's a lot of political motivations going on right now."

Two Harbor Commission seats are up for grabs in next month's election and the races are hotly contested, pitting incumbents Greg Dale and Patrick Higgins against challengers Nick Angeloff and Susan Rotwein. In the campaigns, the district's 2013 acquisition of the abandoned and dilapidated mill site from Freshwater Tissue Co. has taken center stage, with the challengers arguing the district should have left the site in private hands and the incumbents saying the acquisition was imperative to access millions of dollars in federal funds to clean up the site and fend off a looming environmental disaster.

When the district took control of the site, it also put down $320,000 in exchange for an option to purchase all of Freshwater Tissue's property on the peninsula. A couple of years later, the district determined it had no need or interest in the bulk of the company's property, but it did want a 16.5-acre piece of land that juts up against the mill site and includes an access road connecting to Old Navy Base Road and a large tarmac area that the old mill owner once used to store wood chips. Crider said the acquisition will make the old mill site more attractive to new tenants, offering increased storage space and the access road, which means large trucks can loop through the property without having to turn around. "It's definitely a strategic property for us to buy," Crider said.

Acquiring the property also opens the door for the district to pursue plans to build a dock that allows four longshoreman crews to simultaneously use four cranes to load a ship. Crider and others have long contended the bay needs such a dock to reach its shipping potential. Crider said Security National has been reticent to invest the millions of dollars needed to maximize the potential of its own dock, and that Schneider Dock south of the Eureka waterfront can only accommodate two longshoreman crews at a time, making it an inefficient option for exporters.

The deal makes sense for Freshwater Tissue, too, according to owner Bob Simpson, because the company plans to use the $594,000 to pay down debt on its other property. Once the other property is debt free, Simpson said the company can secure a small business loan to complete construction on a sawdust briquette manufacturing facility at the mill site. The plan, Simpson said, was to get the deal with the Harbor District done back in July so the new facility would be running by the end of the year, well in advance of the osprey nesting season that severely restricts construction on the peninsula annually from March through August.

The two parties agreed to the deal back in June, but it had to go before the planning commission for a coastal development permit. Because the Harbor District is a public agency, attorneys for both the district and Freshwater Tissue Co. believed a California Map Act exemption applied to the deal and spared the district from having to go through standard processes to split an existing parcel in two and change its ownership.

County counsel and planning staff agreed, telling the planning commission at meetings in August and September (after July's meeting was canceled due to a lack of a quorum) that it was essentially bound by state law to approve the permit that would facilitate the deal unless it found "substantial evidence" that public policy necessitated a more thorough process.

Some of the commissioners, however, were not convinced. Several of them voiced their strong philosophical opposition to public entities acquiring private property or competing with private industry — echoing a campaign rallying cry of the district's challengers. And why, commissioner Alan Bongio wondered, should the district be exempt from the same California Map Act rules that apply to all private citizens?

Commissioner Lee Ulansey said he doubted state law exempts public agencies from the Map Act entirely and said the same conditions the commission normally applies to subdivisions should apply to this deal. In August, the commission approved the subdivision of Chairman Robert Morris' parcel of Harrison Avenue into 16 lots, an approval that came with a host of conditions, including everything from environmental protections to Americans with Disability Act compliance. Why, Ulansey asked, couldn't the commission simply impose conditions on its approval of this CDP?

Deputy County Counsel Joel Ellinwood said the planning commission simply didn't have any legal authority in this case. "The authority to condition approval is dependent on the authority to grant or withhold a permit, and in this case you don't have any authority because (the deal) is exempt," he said.

This discussion played out over the course of five and a half hours spread over two meetings, and culminated with the commission's approval of the CDP with conditions, mostly just requiring the district to comply with county regulations it would have been held to anyway. By then, two months had gone by.

The delay in approval caused the Harbor District some added expense, according to Crider, but nothing too major.

But for Simpson and Freshwater Tissue, the delayed approval cost a year's worth of business. Simpson explained that the company is now in the midst of waiting for approval of its loan, which likely won't come until November or December. Then it will have to wait up to six months for equipment to be shipped to the site — after the beginning of osprey nesting season — meaning the company likely won't be able to get busy on construction until September of 2016. That's a costly delay for a business that Simpson expects to earn $500,000 to $1 million annually, employ 18 people and give local sawmills another place to market waste materials.

"That's what they've effectively cost me with this little political stunt," Simpson said, adding that it was frustrating to watch the CDP for his project — initially placed on the commission's consent calendar — languish while a "nearly identical" one for the Loleta Community Services District was passed without discussion in October. "We lose one year because of the games that were played by that planning commission."

But is there any evidence politics were at play in those commission meetings? Not really, but some commissioners do have ties to challenger Nick Angeloff, who's an advisory board member to a private political corporation — the Humboldt Coalition for Property Rights (HumCPR) — that Ulansey founded and that once listed commission chair Robert Morris as its treasurer. (Morris also donated $500 to Angeloff's campaign). David Schneider — whose Schneider Dock is now in danger of competing with a public facility — also donated $500 to Angeloff. And an email chain obtained by the Journal shows current HumCPR Executive Director Alec Ziegler was talking to his members and board about Dale facing a potential legal challenge weeks before local taxpayer's advocate Leo Sears filed a conflict of interest lawsuit against the district on Oct. 5.

For his part, Ulansey took to a local blog recently to dispute a charge that he's actively working to shape the outcome of the Harbor District races. He wrote that he knows and likes both Angeloff and Dale, and that the county is lucky to have "two knowledgeable and committed" people in the race. When it comes to the Freshwater Tissue deal, Ulansey urged those curious to watch the meeting for themselves. "I am quite confident that anyone with an open mind will find the theme of the meeting to be an attempt to find fairness and equity," he wrote.

Editor’s Note: After publishing this story, it came to the Journal’s attention that Harbor Commissioner Greg Dale is currently listed on the Humboldt Coalition for Property Rights’ website as an advisory board member, though he is not one of the 13 board members listed in the group’s Fall 2015 newsletter. (While there are nine names that appear on both lists, there are other discrepancies between the newsletter and the website, including the site’s still listing Sally MacDonald as HumCPR’s executive director even though she left the position in December.) We called Dale to discuss and he confirmed that he agreed to serve on the advisory board some years back, prior to his becoming a commissioner in 2011. Dale said the board never met and his contributions were limited to offering an occasional opinion when asked by HumCPR founder Lee Ulansey. In recent years, Dale said he’s had little to do with the group and that he intends to ask off of the advisory board if HumCPR, in fact, still considers him to be on it.

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