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Headwaters Forest Appraisal Review - Page 3 



MBF of volume was needed for wildlife protection purposes, for a total "leave 

 or deferred" volume of 18,849 MBF. This "leave or deferred" tree volume was 

 deducted from the net merchantable timber leaving a loggable timber component, 

 sunnarized as follows: 



Old-growth redwood 

 Young-growth redwood 

 Old-growth Douglas-fir 

 Young-growth Douglas-fir 

 Grand fir and hemlock 

 Total 



In addition to sawlogs, an estimate was made for merchantable cull log volume 

 consisting of two categories of material, special cull logs and utility logs. 

 These logs are also referred to as cull peelers and chip culls. Merchantable 

 volume for this material was estimated to be 14,879 HBF, of which 12,638 MBF 

 was considered loggable. 



Highest and Best Use - The property Is zoned by Humboldt County as Timber 

 Production Zone (TPZ). The primary use allowed by this zoning classification 

 is forest management; minimum parcel size is 160 acres. Current use Is forest 

 management. The appraiser concluded that the highest and best use would be for 

 growth and harvest of sawlogs, wood fiber and other timber products. 



VALUATION 



The appraiser's methodology for arriving at a market value was to first divide 

 the property Into Its two basic parts - the loggable timber component and the 

 land component, including all of the remaining trees. These components were 

 appraised separately by the sales comparison approach, then combined Into a 

 single estimate of value for the whole property. The appraiser concluded that 

 the Income capitalization and cost approaches were not suited for the valuation 

 of timberland, although variations of the approaches are sometimes used as a 

 check of the sales comparison approach. Units of comparison were value per 

 acre and value per MBF of timber. 



LoQoable Timber - Two appraisal approaches were used to develop value estimates 

 for the loggable timber, the delivered log or pond approach and the sales 

 comparison approach. By the delivered log approach, log prices (quotations as 

 well as contract rates) were obtained from local mills, log buyers and forest 

 managers. From this market data, the appraiser estimated delivered log values 

 per MBF for old-growth and young-growth timber by species. Values on the stump 

 were then estimated by deducting all logging and road building costs, 

 allowances for overhead and supervision, preparation of State-required timber 

 harvest plans (THP), and other related activities. Including wildlife studies 

 for northern spotted owl and marbled murrelet. Also deducted were State yield 

 taxes. Cost estimates were obtained from local log buyers and forest managers 

 familiar with market conditions in the region. 



By the sales comparison approach, timber values were developed by comparison to 

 seven Six Rivers National Forest and Jackson State Forest sturopage sales and 

 two property sales with fairly substantial volumes of old-growth Douglas-fir. 

 None of the stumpage sales, however, included old-growth redwood since local 



