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Branching Out

From a remote ridge at 2,200 feet elevation behind Underwood Mountain, Jason Spadaro surveys a clear-cut landscape. The wind is blowing, hard. Bonneville Power Administration transmission towers march across the slopes.

Connecting the dots, Spadaro imagines a day when dozens of giant wind turbines planted on these ridges will harness the gusts that blow through the Columbia River Gorge.

Spadaro is the top executive of both SDS Lumber Co. and Broughton Lumber Co. The two companies, mainstays of the gorge timber economy for decades, now are proposing to combine their lands and build a 44-turbine wind project here.

“To my knowledge, we will be the first company in the country to do wind projects on commercial forest land,” said Spadaro. Despite some local opposition, they hope to apply for county permits to build the project by year’s end.

Four miles away near the Columbia River, the rusting buildings of the old Broughton mill site spread over 60 acres just across Highway 14 from a world-class windsurfing site.

Broughton Lumber wants to invest $70 million to turn this industrial eyesore into a 245-unit destination resort. Broughton Landing would be the largest rural development ever allowed in the scenic area.

But public comment is running five-to-one against the project, and action by the Columbia River Gorge Commission on the project has been delayed several times.

SDS and Broughton are entering uncharted territory.

Their political and economic muscle carried the two companies through the roller coaster of a deep timber industry recession in the 1980s and the steep decline of the federal timber sale program in the 1990s.

But the challenges both face as they attempt to evolve and diversify in the nation’s only national scenic area are requiring more finesse.

Logging is one thing. Winning the hearts and minds of their neighbors for projects that will change the very experience of living and playing in the gorge is another.

Ronda Crumpacker, who owns property near Underwood Mountain, says the wind project will hurt property values. “Instead of driving to the gorge and seeing this incredible scenic area, people are going to see these 400-foot-high monstrosities,” she said. “It makes me question whether I want to live in Underwood.”

Sally Newell, a former Columbia River Gorge commissioner and longtime Underwood resident, admits she’s ambivalent about both projects. “If I had to say, more of the opposition is coming from people who have not lived here as long,” she said. “These are the people who think they have moved to paradise and want to slam the gate shut behind them.”

A long history

The relationship between SDS Lumber and Broughton Lumber is complex and intertwined.

Broughton Lumber Co. was founded in 1923 by members of the Stevenson and Broughton families. The company was a colorful player in the early history of logging in the Columbia River Gorge, logging private and national forest land near the company towns of Willard and Mill A and floating squared-off log sections down the mountain via a wood log flume to its mill near Underwood.

Brothers Wally and Bruce M. Stevenson, both World War II Navy veterans, co-founded SDS in 1946. Over the years, the two privately held companies competed with each other and with much bigger timber companies in bidding for federal timber on the Gifford Pinchot National Forest.

Broughton closed its Willard mill in 1986. Soon after, the log flume, the last in the nation, was partially dismantled. Portions of the flume and the old mill buildings survive, and Broughton now contracts with SDS to manage the 10,000 acres it owns adjacent to Underwood Mountain for timber production.

The same year the Willard mill closed, SDS built a modern sawmill in Bingen. That was also the year Congress established the Columbia River Gorge National Scenic Area – with the support of SDS Lumber Co., which has extensive land holdings in the scenic area.

“A make-or-break portion of the Scenic Area Act was that logging would continue in the general management area,” Newell recalled. And SDS was at the table during those negotiations, she said.

SDS adapted to the steep decline in the federal timber sale program in the early 1990s by managing its own lands intensively and buying timber from other sources – even joining a Northwest consortium that bought spruce and larch logs from the forest of eastern Russia in the mid-1990s.

The company closed its plywood mill in 2002, but its Bingen stud mill continues to manufacture about 100 million board feet of premium-quality lumber annually. Today, the company owns 70,000 acres in Washington and Oregon, all within a 35-mile radius of its Bingen mill. It does not disclose its annual sales or other financial information.

Although the companies remain separate corporate entities, they have board members in common. And Spadaro is their public face as both seek to leverage their economic power to launch new ventures.

The housing business

Like other timberland owners, SDS has discovered that some of its land – in Carson, in the Snowden area and near Northwestern Lake – could be worth more sprouting houses instead of trees.

Spadaro has applied to Skamania County to convert 50 acres of SDS timberland in Carson to residential development. Over the long term, the company proposes to build up to 70 houses on acre and half-acre lots nestled against the Cascade foothills, with green space buffers and wetland reserves.

Despite concerns about the capacity of Carson’s water supply, Skamania County commissioners approved a zone change this fall allowing the development.

So far, both SDS and Broughton have chosen to hold most of their commercial timberland rather than sell it to investors or real estate speculators.

That makes them anomalies in the Northwest, where commercial timberland is increasingly a commodity to be bought and sold and managed for maximum profit, says Forest Service research economist Richard Haynes, an expert on the Northwest timber economy.

“We’ve seen an enormous sell-off of timberland to timber investment management organizations, mostly owned by pension funds,” Haynes said. “The industry here, outside of Weyerhaeuser, has already shifted to depending on private timber they don’t own. What the companies then get are timber supply agreements. It’s being forced mostly by the stockholders, who want to get a higher rate of return. ”

SDS employs more than 300 loggers and millworkers throughout the mid-gorge region. Today, it is the second-largest private timberland owner and one of the largest private employers in the gorge.

Over the years, both companies have vigorously defended their right to manage their lands without interference from the state or the federal government. In 1999, SDS successfully challenged the state of Washington over rules protecting spotted owl habitat on private land. Last year SDS Chief Forester Frank Backus testified against expanding wilderness protection in Oregon’s Mount Hood National Forest, saying it would take too much timber out of production. Also last year, Spadaro and SDS owners gave $5,000 to property rights advocate John Groen, who ran an unsuccessful race for the Washington Supreme Court.

But Skamania and western Klickitat County no longer survive on timber alone. Many economists believe the region’s economic future lies in tourism and outdoor recreation, high-tech industries and wind energy, and a housing trend economists call “amenity migration.” (Translation: well-off home buyers are attracted to areas of natural beauty.)

In recent years, the west end of the gorge has come into its own as a tourist destination. Windsurfing, hiking and white-water rafting attract tourists from across the Northwest and beyond. Skamania County is now a suburb of the Portland-Vancouver metro area. Interstate 84 makes the commute doable; 60 percent of Skamania County’s work force commutes to jobs outside the county.

SDS and Broughton are moving to capture a share of the region’s high-end tourism and housing market. That’s shrewd, said Haynes, the Forest Service economist.

“There are always going to be smart business people who see a gap and step in,” he said. “The gorge, in terms of amenity migration, is a very attractive place. ”

Meanwhile, the east end of the gorge has become fertile ground for wind farms. The boom has accelerated with new policies adopted in both Washington and Oregon that require electric utilities to include renewable energy sources in their energy portfolios.

“Here’s an opportunity for a project that wouldn’t add to gorge pollution,” Spadaro said. “It’s all commercial forest land that is actively managed. For us to be able to capture the wind above the land, it’s a win-win.”

Deep local roots

The Stevensons continue to wield enormous influence in the region and beyond. Members of the Stevenson family own the Hood River Best Western Hotel, where the Columbia River Gorge Commission often holds its monthly meetings. SDS Lumber even owns the building in White Salmon where the commission leases its offices.

The Stevenson and Broughton families also have been generous philanthropists, contributing to a variety of civic causes in the mid-gorge area.

Peggy Bryan, director of the Skamania County Economic Development Council, praises the two companies for nourishing their roots and branching out into wind power and resort development.

The $1 million in annual revenue Broughton Landing and the Saddleback Wind Project together would bring into county coffers would equal a quarter to one-fifth the funding the county currently receives from the federal government in compensation for lost timber revenue.

But Friends of the Columbia Gorge, a Portland-based gorge watchdog group, says the companies have failed to respect the values Congress embraced when it established the national scenic area.

SDS and Broughton have fought restrictions on their activities in the scenic area from the beginning, said Friends conservation director Michael Lang, and both companies continue to clear-cut their land around Underwood Mountain.

“If they really are an evolving timber company, they should phase out clear-cutting forest land in a national scenic area, period,” Lang said. “They should rename Underwood Mountain Old Baldy, with what SDS has done to that mountain. Maybe they didn’t specifically violate any law when they clear-cut those lands, but this is a national scenic area. People don’t think there should be clear-cuts.”

“I’m not saying stop logging, I’m saying stop the large-scale clear-cutting. That goes for Broughton as well.”

The Friends group opposes the Broughton Landing project. It argues that the company could build a much smaller but still profitable recreational vehicle resort under existing rules that would fill a need for more campsites in the gorge.

But Skamania and Klickitat counties and the region’s congressional delegation strongly support Broughton Landing. U.S. Sen. Patty Murray and Congressman Brian Baird wrote letters to the gorge commission earlier this year urging that it find a way to allow the resort to go forward.

At public meetings and behind the scenes, Spadaro has worked to build support for both projects – with mixed success.

“I think there are still concerns in Underwood” about Broughton Landing, Newell said, “and I think the major concern is likely to be traffic.” She’s also annoyed, she said, by Broughton’s plan to sell 30 percent of its units for owner-occupied housing. “The aspect of full-time housing caught everyone by surprise.”

“It’s a real tough one for the gorge commission and I don’t envy them,” she said. “You’ve got a former industrial site that surely should get some special consideration. But on the other hand, this resort is going to be right on top of one of the premier recreation sites in the gorge.”

Martha Bennett, former executive director of the gorge commission, calls Spadaro a realist.

“He has been very pragmatic,” she said. “He hasn’t been dogmatic, unlike some of the property rights advocates. I think Jason understood that what he wants to build there benefits from being in the scenic area.”

Though Spadaro initially believed the scenic area act would preclude building the resort and that it might have to be legislated by Congress, Bennett helped persuade him to give the gorge commission process a chance.

“He eventually agreed to attempt a plan amendment, and then if he felt he had given it a good faith effort he could go to Congress,” she said.

Spadaro said he’s still hopeful the system will produce the result he wants so the company won’t have to test its political pull with Congress. “We’ve invested a lot in trying to build consensus and keep this under scenic area jurisdiction, so I hope it doesn’t come to that.”

By Kathie Durbin
Columbian Staff Writer

The Columbian

9 December 2007