State, Salvage Company Agree to Settle Suit

By Beacon Staff

HELENA – The state and a company that wants to lift decades-old logs from the bottom of Flathead Lake, so they can be sold and made into lumber, have agreed to settle a lawsuit over ownership of the logs.

The Montana Land Board this week endorsed an agreement declaring that North Shore Development LLC owns submerged logs stamped with an encircled “N,” similar to a livestock brand, and that the state owns unmarked logs previously claimed by North Shore. The agreement, which requires court approval, does not authorize log salvage. For that, North Shore needs state permits preceded by environmental analyses.

Water as deep as 50 feet covers the logs, called “deadheads,” resting on the state-owned bed of Flathead Lake. The logs in Somers Bay were taken there years ago for processing at a mill, which burned in the mid-20th century.

Historically, logs taken from northwestern Montana forests reached mills via water and then were stored in water to protect wood quality. Occasionally, logs sank. They have been removed from a variety of water bodies in timber states.

North Shore was formed to salvage logs in Somers Bay and claimed rights to them through historic business transactions.

Improvements in equipment for log retrieval heightened interest in the salvage work and in 2005 North Shore applied for the one state permit the company thought was necessary, David Zabel, a lawyer for the company, said in a phone interview Wednesday. The company removed some logs in 2006. State officials then said more permits were needed, they challenged ownership of the logs and the Montana Department of Natural Resources and Conservation sued.

North Shore has sent divers to evaluate the logs underwater, but is uncertain of the quantity, Zabel said.

“We think there’s a lot,” he said.

“If we didn’t think there were enough logs to make it an economically viable operation, we wouldn’t have pursued it these past couple of years.”

Foresters say oxygen-deprived logs taken from water typically emerge in good condition. In addition, trees cut years ago likely were of larger diameter than those cut recently and therefore lack knots, they say. A diver told the state Land Board that he observed logs ranging from 16 inches to 4 feet in diameter.

Many of the large-diameter trees on private land have been cut, federal timber sales have decreased and those that are offered generally feature smaller trees. Preventing removal of old-growth, large trees has been a push by groups concerned about the place of those trees in forest ecosystems.

Under terms of the settlement agreement, the Department of Natural Resources and Conservation would grant North Shore the right to salvage logs for 10 years, with a right to renew for another 10. That span would allow North Shore to retrieve logs when economic conditions are the most favorable, Zabel said.

North Shore would pay the state $21,000 a year for salvage rights. The company also would pay the state for the salvage of unmarked logs, with the sum depending on their size. North Shore could operate in no more than 5 acres at any one time.

Zabel said that how quickly North Shore seeks state permits for the salvage work depends on how soon the settlement is acted upon in court. DNRC’s Tom Schultz said the settlement likely will be submitted to the court within a month.

Laney Hanzel of the Flathead Lakers said the conservation group has been concerned about log movement affecting erosion control. Zabel said North Shore believes the work can be done without environmental harm.